Thread by @edwardfishman

.@POTUS said he is "convinced" Putin has decided to invade Ukraine. It was a chilling statement and an ominous sign of what lies ahead. If Putin does invade, the US will follow up in short order with its threat to impose sanctions. A few thoughts on what that means:

(1) The US sanctions package will be very strong—at least an order of magnitude tougher than 2014. What does that mean? Not Iran-level sanctions (yet), but starting down that path: the largest Russian banks will be cut off from the US financial system ...

... which, in itself, will cause substantial economic dislocation. Other measures will include sweeping export controls and restrictions on state-owned Russian companies. The Russian economy will suffer a deep recession. No, Putin has not made the economy "sanctions proof."

(2) The EU, UK, Canada, and other countries will also impose sanctions. These will resemble the US package but won't be identical. Differences in detail won't matter much, as global banks and companies will comply with US sanctions (and EU/UK ones where they're more stringent).

(3) If @POTUS is correct and Russia intends to attack Kyiv, this will be a major war. What does that mean for sanctions? I suspect we're on a conveyor belt to Iran-style sanctions in the coming months, likely with Congressional involvement ...

... Oil and gas may be left out of the first tranche, but they won't be off the table forever. Energy accounts for 2/3 of Russia's export revenues and 50% of its budget. A protracted war means that oil and gas production and (maybe) sales may eventually come under US sanctions.

Recall that the critical sanctions on Iran's oil sales were the result of Congressional legislation (NDAA for FY 2012). This could easily happen again, this time with measures targeted at Russia.

(4) The imposition of sanctions will not be a sign of policy success. They will be the US and its allies making good on a threat. Rather it will signal that the policy goal — using the threat of sanctions to deter Russia — has failed ...

... The failure of sanctions as a deterrent should raise questions about *why* it didn't work. The kneejerk reaction will be that "sanctions don't work." But there are multiple viable explanations, including:

a) Putin may not have believed that the West was prepared to impose devastating sanctions [on this, I'm confident he is wrong and Biden isn't bluffing]
b) Putin may have believed Biden's threats but was overconfident about Russia's ability to absorb the costs

c) Putin may have believed Biden's threats and accurately forecasted the costs, and decided that an invasion was still worth it
There are other possible explanations. But the right answer will certainly be more nuanced than "sanctions don't work."

(5) Sanctions will mark a new era for Russia, in which its economy is largely cut off from global markets. It will become, as DNSA Daleep Singh said earlier today, a "pariah." This is a decisive break from the post-Cold War strategy of integrating Russia into the world economy.

This is nothing to celebrate. It will be bad for Russians & the world. But the US & its allies are determined to show that invading neighbors and redrawing borders by force carries major costs—a message that (hopefully) will affect the calculus of other aggressors in the future.